Smart Buildings, Smart Business: Why Intelligent Software Is the Key to Energy Management
By Enrico Ladendorf, Founder & Managing Director, Pason Energy
Enrico Ladendorf, Founder & Managing Director, Pason Energy
For commercial and industrial building and facility managers – whether they are managing one building or a portfolio –getting power from your utility isn’t as easy (or cheap) as it used to be. Previously – before today’s energy technology revolution – procuring energy was as simple as connecting a building to the electrical grid during construction, turning on the power, and then paying the local utility a known, fixed rate for energy usage. Today, building operators must factor in variable electricity rates based on energy usage, peak demand usage, and time of usage, just to name a few challenges. The result is added complexity, and often added costs, at each step of meeting a building’s energy needs.
‘Solar-plus-storage’ as well as storageonly solutions (in situations where solar is not practical or desirable) has emerged as one of the few ways to reliably combat skyrocketing utility bills. Solar power systems help address the energy portion of the bill while storage systems help offset the demand portion by better managing the company’s high peaks in energy usage. While the business case for solar-plusstorage or storage-only often sells itself, at least on paper, the actual economics of solar and energy storage often hinges on having the right energy management software for system performance. In other words, actual savings and proposed savings need to be aligned in a real-world environment, not just on paper, and that largely depends on the software a company chooses – which means a lot is riding on this one IT decision.
""Besides having integrated software from the beginning, it is equally important to have a system that can adapt on an on-going basis to changing energy usage patterns, changing utility rates, and even changing weather patterns""
To determine a reliable return on investment and sufficient business value for a solar-plus-storage system, building operators have to factor in many fluid metrics: load requirements, storage power output and capacity, system cost, the cost of capital, future peaks in electrical demand, solar production, federal and state level incentives, and the ability to predict external factors like weather changes, among other factors. Any energy storage system must be able to deliver value in the event of equipment additions, or upgrades that alter the peak load, high demand events, changing regulatory and service costs.
Since energy storage is such an important IT decision with long-term business consequences, what should a CIO who is looking at an energy storage solution and management software know before presenting their findings to the board?
UNDERSTAND HOW SOLAR AND STORAGE CAN WORK TOGETHER TO LOWER UTILITY COSTS
With so many variables to consider, energy management is beyond the control of any single stakeholder in the company – it requires machine learning and other advanced software capabilities to keep the system well managed.For commercial and industrial facilities, utility costs have two major components, energy usage and peak demand usage. Peak demand charges can be one of the fastest growing components of a utility bill for commercial and industrial customers. While rates will vary depending on industry and geography, demand rates can often represents as much as 30-70 percent of a company’s monthly utility bill.
Energy storage systems can not only store energy during periods of low energy loads and release it during periods of peak demand, but intelligent systems will go a step further and actively store the energy at the most economical times (which many times will be when solar is being produced – at no cost) and then deploy that energy when energy usage is at its highest. These systems make complex decisions in realtime to decrease the amount of peak power being drawn from the grid, lower peak demand and optimize overall energy usage.
Solar energy systems on the other hand help offset the energy portion of utility costs. In some cases, installing solar on its own may be economically viable if a large enough system can be deployed to benefit from a favorable utility rate. However, many buildings simply do not have enough rooftop space to support a solar system large enough to complement or offset enough of a building’s energy needs or may face other challenges such as building ownership issues or being in a low solar production area. Additionally, many utilities are moving away from rates that favor solar. In those situations, either a storage-only or a smaller solar installation paired with energy storage can be economically viable, provided that the system has the right management software. With sophisticated machine learning analytics and system controls to manage the release of energy at optimal times, an energy storage system together with solar enables optimized utility bill savings for both peak and energy charges– the two work in concert orchestrated by intelligent software.
BE SURE THAT WHAT YOU GET ON PAPER TODAY WILL ACTUALLY BE DELIVERED TOMORROW
It is crucial when modeling the price and size of an energy storage system that the modeling software doing the analysis can “speak” with the energy management system and work in tandem to eliminate surprises in performance and be in sync from day one.
This enables installers to confidently right size and model the financial performance of energy storage projects – not just the operational performance – to significantly lower project risks and costs, without inadvertently or intentionally oversizing the system to address demand peaks. Having the right software system from the beginning will also help shore up financing when it’s needed – because financiers are necessarily risk-conscious. The right technology solution will remove the guesswork of stand-alone modeling software – or worse, messy spreadsheet calculations.
KNOW WHAT HAPPENS WHEN ENERGY USAGE OR RATES CHANGE AFTER A SYSTEM IS INSTALLED
Machine learning has been a game changer for the energy industry, especially for commercial and industrial building owners and operators. These intelligent systems can adjust to real-time changes that would have been impossible before the advent of artificial intelligence. By eliminating the need for human intervention, the right software can predict and manage energy usage in the building by calculating the data on nearly every factor that goes into energy usage and rates. No longer will building operators trigger excessive demand charges set in response to old data. These systems use real-time data to shift loads or change energy output. And more sophisticated systems also include weather forecasting to enhance performance in unpredictable weather.
FINALLY, WHAT TO LOOK FOR WHEN SELECTING A SOLAR-PLUS-STORAGE OR STORAGE-ONLY SYSTEM
Energy storage is still in a relative infancy stage and many energy storage solutions are attracting startups that either don’t understand the energy industry or lack the financial wherewithal for staying power. Some of these companies will eventually learn and grow with the market. But when implementing energy cost reduction measures, most building owners aren’t interested in gambling a huge investment on companies that can’t demonstrate staying power here and now. Again, a lot is riding on this one IT decision with long-term business consequences and CIOs need an energy partner they can trust
Bottom line, having the right software platform should be top-of-mind for the success of any energy storage solution, with or without integrating solar. Today’s energy technology conducts endlessly complex calculations and converts data into actions and insights designed to meet – and exceed – energy and financial targets. Machine learning and AI do the thinking so businesses can focus on what they do best. The right technology can reliably predict and respond to energy demand, accurately model and estimate energy cost savings and adjust when needed to hit key energy and financial targets. Now, energy intelligent software providers such as Pason Power bring the expertise, track record, resources and next-gen technology that CIOs need to cut expensive utility costs, get control of their energy usage, and grow their company’s bottom line in an ever-changing energy landscape.